Cyprus Mail

EAC unions agree to cutback in perks

The EAC has scrapped 17 allowances outtright

By Elias Hazou

EPOPAI, the biggest trade union of the Electricity Authority of Cyprus (EAC), said on Monday they have agreed to cutbacks in allowances, but reiterated their warning that they would fight any attempt at further reductions in employees’ income.

In all, the overhaul of allowances is projected to generate savings of €1.5m this year compared to 2012. The changes are part of a drive to rationalise the operational expenses of the semi-state enterprise.

Falling sales and also an increase in outstanding bills, due to the financial crisis, have led to declining revenue, and the utility is being pressured to slash costs in order to balance its books.

Following months of dialogue, three of the four main trade unions have rubberstamped an agreement with their employer – the EAC – to streamline the raft of allowances.

According to the auditor-general, in 2012 a total of 42 allowances were given out to EAC employees. Despite the financial squeeze already taking hold since last year, in 2012 around €11m was paid in allowances – just €400,000 less than 2011. The €11m included overtime pay, which amounted to €3.45m.

The biggest item in 2012 was the ‘outside meal allowance’ where €1,464,703 was paid out, followed by the travel allowance at €456,077.

Under a circular issued by the finance ministry in January of this year, bodies governed by public law – semi-governmental organisations such as the EAC – were asked to conform to around a 15 per cent cut in allowances imposed across the broader public sector (comprising the central government and semi-state organisations).

The allowances agreement between the EAC and the unions entered into force as of 1 October. It provides for the outright scrapping of 17 allowances. Other stipends are either to be slashed or their payment suspended; these will be reviewed at the end of 2014.

The Sunday shift is one of a handful of allowances left untouched.

Among the extras abolished are the overnight allowance and the ‘call allowance’. The latter was paid, for example, to an EAC employee who on a Sunday used his or her phone to call a colleague and tell him to open a warehouse.

The ‘outside meal allowance’ is among those that will be cut by 25 per cent, as is the ‘standby allowance.’ And overtime will be paid only for non-scheduled work (for example technical malfunctions occurring at night), but is to be reduced by 50 per cent.

A lot of the savings will come from restricting the ‘driving allowance’ – paid to any employee of the EAC whose job description does not include driving but who happens to operate a service vehicle. Last year, some 1,000 people were eligible for this extra; now, it will be paid only to about 180 persons. This revision alone is estimated to save around €400,000.

Sources told the Mail that the changes in the allowances would result in a further loss of take-home pay to eligible employees of between €150 to €200 per month.

“It’s a substantial concession on the employees’ part,” said Andreas Panorkos, head of the EPOPAI union.

The decrease in the power utility’s operational costs are highly unlikely to lead to a reduction in the cost of electricity, however.

Despite going along with the changes, the EPOPAI trade union warned it would not tolerate any further revenue cuts.

It’s understood that the EAC plans to abolish around 320 positions, and is in talks with the unions on an early retirement plan. Normally, around 150 people retire from the organisation each year.

Under the 2012 budget for the EAC, the organisation employed 2404 people. The EAC’s budget for 2013 has set aside €5m for early retirement schemes.

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